Broll achieves R326 million sales for shopping centres

FMCG SUPPLIER NEWS

SA Commercial Prop News - Jan 24th, 10:02

Eleven properties previously owned by SA Corporate Real Estate Fund were snapped up by Fairvest Property Holdings Ltd for R326 million, revealing a welcome return of investor appetite for shopping centres within lower living standards measure (LSM) areas. 

South African property management company Broll Property Group sold a portfolio of mainly local shopping centres to JSE-listed Fairvest Property Holdings Limited for R326 million.

Situated in KwaZulu-Natal, Gauteng and the Western Cape, the majority of the properties in the portfolio are shopping centres in low-LSM areas.

Sean Berowsky, national property investments specialist at Broll, says the deal ‘is an exciting one for Fairvest, which will provide them with the ability to grow the fund in the near term in a sector of the market that has seen frenetic deal-making with a spate of new listings entering the market in the last 18 months.’

Berowsky says the deal is consistent with Fairvest’s growth strategy of focusing on retail assets with a low-LSM bias and non-metropolitan weighting, while SA Corporate said the disposal would allow it to manage its resources more optimally by concentrating on its larger property assets.

Tokai Junction Shopping Centre, one of two Western Cape properties, is the sole high-LSM sale, selling for R84.9 million. It has a gross lettable area of over 7 600 square metres and an average gross rental of R108 per square metre.

OmniPlace in Bellville is the only office building in the portfolio, selling for R20 million. Fairvest took transfer of eight of the properties in the portfolio in December 2012 with three more to follow within the next few weeks.

An additional two properties are subject to a put option worth approximately R41.5 million. Subject to the fulfilment of certain conditions, Fairvest could take transfer of the additional properties in March. The first tranche was sold at an initial yield of 10.25%.

SA Corporate Real Estate Fund is an Old Mutual real estate investment trust listed on the JSE Limited, which invests in retail, industrial and office property primarily in the major metropolitan centres of South Africa.

By SA Commercial Prop News